Arch to acquire major stake in Coface

25-02-2020

Arch Capital Group is acquiring a 29.5 percent stake in Coface, a France-based leader in the global trade credit insurance market.

Arch has entered into a share purchase agreement with Natixis regarding the acquisition, which will be completed at €10.70 per share, or approximately €480 million, based on the current number of shares.

Natixis’ seven representatives on Coface’s board of directors will resign and be replaced by four Arch nominees, leaving Coface with a majority of independent directors on its board. Coface will seek a new independent board member and will appoint a chairman of the board from among the independent board members, it said. 

Marc Grandisson, Arch’s chief executive officer, said the re/insurer is looking to make “a long-term, strategic investment in Coface” as part of its strategy to develop uncorrelated sources of underwriting income. Arch has indicated that it does not intend to seek control of Coface for a period of 12 months after the closing of the transaction.

The transaction is not expected to lead to any job losses at Coface. Grandisson said: “We support Coface’s management team and are aligned with their strategic plan.” 

Grandisson emphasised the cultural compatibility between the two firms. “Our companies share a focus on specialty underwriting where knowledge and expertise create value for our clients, and trade credit contributes to Arch’s specialty-driven business model,” he said. 

The transaction remains subject inter alia to antitrust and regulatory approval, including by the French prudential regulator, the Autorité de Controle Prudentiel et de Résolution.

 

Arch Capital, Coface, Natixis, Marc Grandisson, Autorité de Controle Prudentiel et de Résolution

Bermuda Re